Heffernan moves to block Snowy Hydro sale

Reporter: Stephen McDonell

TONY JONES: The privatisation of the Snowy Mountains Hydro Electric Scheme appears to have hit a hurdle, with a last-minute bid to halt the sale. The Liberal senator Bill Heffernan says he'll do what he can to block the sale, saying it's not in Australia's interest to have the Snowy fall into foreign hands and his campaign has drawn Liberal backbenchers, environmentalists, farmers and former Snowy Mountains' workers. Stephen McDonell reports.

STEPHEN McDONELL, REPORTER: The Snowy Mountains Hydro-Electric Scheme is an icon of Australian engineering.

NEWSREEL: Eight miles from Kosciuszko, harnessing the water of the first completed section of the giant Snowy Mountains Hydro Electric Scheme.

STEPHEN McDONELL: It's being privatised in what could bring a $3 billion windfall. Today's full-page advertisements in the financial press called on prospective investors to pre-register for priority shares. But now, one of John Howard's closest allies wants to stop the full sale.

BILL HEFFERNAN, NSW LIBERAL SENATOR: I want Australia to wake up because this is something we shouldn't be doing. We're about to sell, as it were, your mother and these shares, remember, were gifted to the various states and the Commonwealth - no-one paid any money for them.

STEPHEN McDONELL: Bill Heffernan says the sell-off caught him by surprise and today he was trying to find a way to stop foreign companies controlling the Snowy Mountains scheme.

BILL HEFFERNAN: This will be a people decision. And if people - you get what you deserve in this life - if people make enough noise with their local members, we will get this locked up for all time so that no foreign company will own it.

STEPHEN MAYNE, SHAREHOLDER ACTIVIST: Well, Bill Heffernan's a bit of a Johnny-come-lately to this whole debate, given that all the legislation has now gone through and his party, which he's supposed to have so much influence over, has decided to sell its 13 per cent stake and also I think he's being pathetically xenophobic.

STEPHEN McDONELL: The Snowy Mountains Hydro Electric network is currently owned 58 per cent by the NSW Government, 29 per cent by Victoria and 13 per cent by the Federal Government. All three have agreed to sell it, with conditions. The current sale process limits a buyer to 10 per cent of the shares for the next four years. Then the limit can be increased with a 75 per cent vote of shareholders. Bill Heffernan wants the Federal Government not to sell its stake, but increase it - to over 25 per cent. With this holding, the Government could block any future foreign takeover. The Acting Prime Minister says this is not going to happen.

PETER COSTELLO, ACTING PRIME MINISTER: The Commonwealth Government has offered, for sale, its interest in Snowy Hydro and that sale will go ahead.

STEPHEN McDONELL: Some don't oppose the sale, but the way it's being done.

STEPHEN MAYNE: The Snowy should not be privatised with a secret 72-year water licence. 72 years is too long. A private company will, of course, try to maximise profits and you shouldn't have a secret water licence.

STEPHEN McDONELL: Environmentalists say the recent agreement to increase water to the Snowy River is jeopardised by privatisation.

JEFF ANGEL, EXECUTIVE DIRECTOR, TOTAL ENVIRONMENT CENTRE: The fact is that when you have direct government control and ownership, it was a lot easier to negotiate environmental flows for the Snowy River. We were able to save the Snowy River because the Government could tell Snowy Hydro what to do.

STEPHEN McDONELL: The Greens say they have legal advice that the Snowy privatisation is illegal. They could soon get a call from Bill Heffernan to form an unlikely political alliance. Stephen McDonell, Lateline.